What Is A 501(c)(7) Nonprofit Organization?

Рет қаралды 5,637

Күн бұрын

We are continuing our multi-article series on the other nonprofits…and by other, we mean those that are not charitable in nature. So far, we’ve explored social welfare nonprofits and business leagues. Today’s video examines the third most common type of non-charitable nonprofit, the 501(c)(7) social or recreation organization.
📚 ADDITIONAL RESOURCES:
•ARTICLE: “What Is A 501(c)(7)?” bit.ly/3JzOQM8
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•Fill out this form for a FREE consultation on how to start a nonprofit: bit.ly/3Tu9nYE
•Register for Fundraising TV: www.501c3.org/fundraising-tv/
•Download the FREE eBook “10 Things You Need to Know Before Starting a Nonprofit” bit.ly/3XhFag0
0:00 Introduction
0:38 501(c)(7) Definition
1:20 501(c)(7) IRS Definition
2:04 Example #1: Social Clubs
2:50 Example #2 Hobby Clubs
3:20 Example #3 Recreational Clubs
4:08 501(c)(7) Restrictions: Membership Required
4:40 501(c)(7) Restrictions: Members Only
5:06 501(c)(7) Restrictions: Member Income Only
5:43 What NOT To Do
7:42 How to Start a 501(c)(7)
8:23 Conclusion

Пікірлер: 35

@FoundationGroup 2 жыл бұрын

If you need help filing for IRS 501(c)(3) status, we’d love to help! You can fill out our contact form at bit.ly/3i6rFxz or give us a call at 888-361-9445.

@rsjohnson2u Жыл бұрын

I'm the treasurer for a hobby beekeeping club (association). Similar clubs in my state are 501(c)3 (under education) but it seems that 501(c)7 is a better fit. We have been nonprofit as determined by the State of Washington since 1979.

@gregmcray Жыл бұрын

I guess it really depends on your primary focus. I can easily see bee-keeping going either way. We also see agriculture-based organizations similar to this organized as 501(c)(5)s.

@ChickensForEggs 9 ай бұрын

We are looking for information on the very same topic - a beekeeping educational and social club in California. We are trying to understand the difference between a "nonprofit" and a "not-for-profit" as well as the difference between these, a 501(c)7 and 501(c)5. We have memberships but also take in income from classes and gifts.

@michaellasfetto5810 Жыл бұрын

This is the exact kind of video I have been looking for in trying to understand what my music fraternity alumni chapter can and can't do. I wish we could change our status, since we are a professional fraternity, rather than a social one. This definitely got me thinking. Thank you!

@FoundationGroup Жыл бұрын

Glad this help you, Michael!

@harmonicaman79 Жыл бұрын

Absolutely useful.

@waynecmontgomery 2 жыл бұрын

Great video !!! next time I go to my chess and bingo club I will have my ear to the floor listening for oil 🤣🤣

@tomkuemmerle 2 жыл бұрын

I plan to reach out tomorrow. 7/5/22

@danforthadventures3404 Жыл бұрын

What non profit is good for a motorcycle organization?

@ChickensForEggs 9 ай бұрын

Can you speak to the difference between a "nonprofit" and a "not-for-profit"? These are two different things, and we are trying to determine the pros and cons for us, as a beekeeping hobby and educational club in California.

@FoundationGroup 9 ай бұрын

Actually, they're not. That's a common misconception. The terms are almost always used interchangeably. There is no legal distinction between the two.

@rodney0311 2 ай бұрын

What are the restrictions on Fund Raisers? Is there a cap on how much can come from nonmembers?

@FoundationGroup 2 ай бұрын

There are definitely limits for 501c7 organizations. No more than 35% of total revenue can come from nonmembers.

@rodney0311 2 ай бұрын

@@FoundationGroup What is the penalty for exceeding 35% limit?

@neonjohn4446 Ай бұрын

My 501C7 gun club allows non members to attend scheduled shooting matches if they pay a registration fee. Should that income be reported on line 39b of form 990ez as public use of club facilities and is it limited to 15% of the clubs gross income?

@FoundationGroup 29 күн бұрын

Yes and yes. Sorry for the delayed response.

@pairodimes4371 7 ай бұрын

Could a space have open to the public time and Member only time?

@FoundationGroup 7 ай бұрын

It could theoretically, but keep it limited. Non-member revenue for use of the facility and services cannot exceed 15% of gross receipts. Exceed that limit and you seriously jeopardize your exempt status.

@dream_chaser7569 Жыл бұрын

I need help starting a 501c7 club I’ve been doing my research But something that you said, made me rethink my approach? So I would like to speak to you about my inquiries

@FoundationGroup Жыл бұрын

Hi, Dream_Chaser. We'd love to speak with you about your club. The best way to schedule that conversation is to go to the following page on our website and complete the appointment request at the bottom of the page. One of our team members will be in touch quickly. Thanks! www.501c3.org/501c3-services/start-a-501c3-nonprofit/

@jonathanmorgan5312 8 ай бұрын

I'm currently in the process of trying to help an amateur sports team apply for 501(c)(7) status, and the question of donations has come up. From what I can tell in Publication 557, up to 35% of the gross receipts can be from non-member income, but I am concerned if I'm misunderstanding that. Also, if that is the case, what if it exceeds 35%? Is the status revoked, or is the organization just simply required to pay taxes on anything exceeding the 35%? I tried calling the IRS and they more or less told me to read the publications then hung up on me.

@FoundationGroup 8 ай бұрын

The IRS is not exactly known for Chick-fil-A level customer service, so no great shock there unfortunately. 501(c)(7)s are member organizations that should be primarily about the benefit of their members within the scope of their approved purpose. In your case, it's an amateur sports team. If nonmember revenue exceeds 35%, then the argument can be legitimately made that your organization really isn't primarily for your members, but rather a combination of your members and the general public. In cases like that, yes, the IRS will revoke your 501(c)(7) status. It is highly recommended that you stay well below that line.

@lindsayann7756 4 ай бұрын

How does the sale of alcoholic beverages change if to members only? Is that still within the rules of the social club?

@FoundationGroup 4 ай бұрын

The IRS doesn't have any rules specifically about alcohol. As long as the organization has the proper state and/or local permitting to serve alcohol, there should be no problems with sales to members.

@lindsayann7756 4 ай бұрын

@@FoundationGroup do membership dues have to be monthly or can they be annually? Is there anything from prohibiting a one time initiation fee or does on going dues have to be apart of it?

@lindsayann7756 4 ай бұрын

@@FoundationGroup thank you!!! I appreciate your help!

@FoundationGroup 4 ай бұрын

Glad to help!

@FoundationGroup 4 ай бұрын

No rules about that, either. However, I would suggest you create a written policy on whatever you decide and let the members ratify that at an annual meeting of the members.

@loganlesmann640 2 ай бұрын

Would a student-led university social club count as a 501(c)(7)?

@loganlesmann640 2 ай бұрын

We do not have formal memberships...

@FoundationGroup 2 ай бұрын

It all hinges on your definition of "formal" member. Because a 501(c)(7) is significantly limited in the amount of non-member revenue it can generate, it's pretty much required that you have a membership AND that the members be the primary source of income. Now, you can loosely define membership if you want, but it needs to be plain. 501(c)(7) organizations are not meant to serve an open community, but rather a closed group.